Although single-coloured ensigns started replacing the old Tudor stripped ensigns since the early 1620s, it wasn't before the First Dutch War that the practice of supplying all the ships of a squadron with ensigns of the squadronal colour (red, white and blue) was ultimately established.
As for the Red Ensign, a Royal Proclamation of King Charles II in 1674 also established this one as the appropriate flag to be worn by English merchant ships, so thereafter leading to countless confusions, further increased by being this one the flag used by English privateers too.
Sources: Anonymous manuscript from 1670, reprinted in Amsterdam 1966 as «Flags of the World 1669-1670» | W. G. Perrin, «British flags», Cambridge 1922
Sizes: ensign W12 x L18 mm, mast flags W8 x L12 mm, jack W6 x L9 mm, pennant W4 x L48 mm.